County to use budget surplus to restore grant funding

Over the objections of Councilman George Cole, Sussex County Council voted Tuesday – on the condition of a successful auditor’s report expected in the next few months – to use $594,354 of a potential $614,000 general fund surplus to reinstate some county service grants.

After hearing the un-audited review of their financial position as of June 30, 2010, they voted to add an additional $2,500.00 to individual local law-enforcement grants for Sussex towns. This year, each municipality received $20,000 per year in police grants, which is less than the $25,000 they received in 2009. The additional funding will total $52,000.

The council also voted to restore the fire service grants to their 2009 level, at a cost of about $91,854, as well as to suspend the county capitation tax for one year and have no reduction on funding for local libraries – at a cost of $250,000. They also voted to spend about $200,000 for employee recognition for successful budget reduction efforts.

“This is nice, but it may not be the time to do it,” said Cole. “It is a positive report, but is it positive enough? This may look reckless and would appear frivolous.”

When asked which of the services could be considered reckless, he clarified, saying “to go on one positive report looks frivolous, not any of these services. At 1.3 percent [the percentage of the budget that he quoted as surplus], that’s a fragile state to be in. It’s not like the towns are going to go belly up if we don’t give them $52,000. I am a little concerned about the state of the economy, with this amount of money, and we are starting to give it away. It doesn’t look responsible.”

Council President Vance Phillips asked County Administrator David Baker about the state of the county’s reserves, if they were “healthy” and if raising taxes would be their only option if reserves weren’t sufficient after all. Baker said their reserves were sufficient, adding that “it is always possible the state making changes to funding mechanisms.”

Phillips then said, “I don’t view the government as some people do, as being a business to earn a profit, rather to break even. It almost seems prudent to return the excess in this manner.”

Councilman Michael Vincent added that the suspension of the capitation tax wouldn’t even until next year’s budget, because tax bills for this year have already gone out. (Tax payments are due back to the county on Sept. 30.) He added that, if something were to change between now and when the final auditor’s report came in, it “wouldn’t be that drastic.”

The council voted 4-1 to give Baker authority to make the changes contingent upon his approval of the audit. If the audit comes in below the expected surplus of a little over $600,000, they stated that it was understood he would come back to council for further direction.

Cole said after voting that he was proud of Sussex County Council’s reputation of having fiscal responsibility and “can’t be proud of this.”

“When we have a $600,000 surplus and we are going to spend $594,000 of it, and there is no critical need, it’s inappropriate.”

Cole also asked that “discussion and possible vote” be added in the future to such items as they appear on the agenda, as it was written only as a “review of June 30, 2010, financial position.” He said no one reading the agenda would have known there would be a vote taken.